OLD, NEW LINKED IN D.C. PROJECT

An unusual $55 million development project combining new construction and renovation of older buildings has been completed off Pennsylvania Avenue midway between the White House and Capitol Hill.

The developer, Oliver Carr Co., rehabilitated two 19th Century brick buildings on the site and linked them to a 12-story, aluminium-trimmed glass and precast concrete office and retail tower.

The project, called Liberty Place, provides 170,000 square feet of office space and about 6,000 square feet of stores.

The Teachers Insurance and Annuity Association, which provided the permanent financing for the building, is one of Carr`s ownership partners.

Marketing is aimed at midsized law firms, associations and legislative-affairs offices of Fortune 500 companies.

The project is in the Pennsylvania Quarter, a nine-block section of Pennsylvania Avenue undergoing renovation.

It faces competition from several neighbors completed last year, including 600,000 square feet of office space in the mixed-use Market Square on the next block. With rents of about $30 a square foot, its two buildings are 78 percent occupied.

No leases have yet been signed in Liberty Place, where rents are $30 to $35 a square foot.

''We found in the past that smaller tenants don`t do much leasing before the building is completed,'' said John Donovan, senior vice president of leasing for Carr. ''They tend to want to see the finished product.''

Liberty Place, completed in late January, occupies the western leg of the triangle formed by Seventh Street, D Street and Indiana Avenue, part of a National Historic Site.

It is an area of transition between a hodgepodge of diverse structures and the massive government edifices across Pennsylvania Avenue.